ICO scams: The ICO advisory firm, Statis Group, just announced its recent study that showed that nearly 80 percent of initial coin offerings (ICOs) held in 2017 were scams.
The study took into account the lifecycle of ICOs, from the initial proposal of sale to the most mature phase of trading on a cryptocurrency exchange.
The study found:
“On the basis of the above classification, as a percentage of the total number of ICOs, we found that approximately 78% of ICO’s were Identified Scams, ~4% Failed, ~3% had Gone Dead, and ~15% went on to trade on an exchange.”
In the study, the ICOs that went dead were not listed on exchanges for trading pairs and had no code contribution on Github. Total funding of coins in 2017 amounted to $11.9 billion. 11 percent of those funds went to funding smaller scams, and the vast majority went to three major scams.
The three top scams were:
- Pincoin ($660 million)
- Arisebanks ($600 million)
- Savedroid ($50 million)
Combined, the scams come to $1.31 billion. This suggests that while a large number of ICOs held were scams very little funding was raised by them compared to the industry as a whole. However, $1.31 billion is still a lot of money for one year.
TechCrunch recently released a new report which found that more than a thousand crypto-related projects had already failed by June 30th, 2018. The data was composed of data from Coinopsy and Deadcoins, two websites that monitor failed crypto projects.
The projects ranged from outright scams to true abandonware. We must look at this from a larger perspective though. While the fundraising route isn’t traditional, these projects are startups. 90% of startups fail, and we can’t expect every new crypto-related project to automatically succeed, that’s unrealistic.
The fact of the matter is, the best projects will succeed and those either trying to scam investors or ones with poor infrastructure will fail. Just let nature run its course, and the true competitors of the crypto-sphere will emerge—and they have.
Featured Image: financemagnates